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$8B Atlantic Coast Gas Pipeline Canceled As Costs Nearly Doubled

Despite a major win on a right-of-way issue at the U.S. Supreme Court last month, the developers of the Atlantic Coast natural gas pipeline are definitely scrapping the project in view of ongoing delays and major cost overruns.

Dominion Energy and Duke Energy on Sunday said they are canceling the Atlantic Coast Pipeline "due to ongoing delays and increasing cost uncertainty which threaten the economic viability of the project."

Atlantic Coast Pipeline was a project for a 604-mile natural gas pipeline from West Virginia to North Carolina along a route that crosses 16 miles of land within the George Washington National Forest. 

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Last month, the U.S. Supreme Court sided with the developers of the project, clearing some of the obstacles to the completion of the Atlantic Coast Pipeline by ruling that the U.S. Forest Service had the authority to grant the right-of-way to the pipeline to pass through the Appalachian Trail in Virginia.

Despite this favorable ruling, Dominion Energy and Duke Energy scrapped the project as they continue to see many uncertainties and delays in completing it after its costs were expected to nearly double to US$8 billion from the original estimate of US$4.5 to US$5.0 billion.

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"This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States. Until these issues are resolved,S the ability to satisfy the country's energy needs will be significantly challenged," said Thomas F. Farrell, II, Dominion Energy chairman, president, and chief executive officer, and Lynn J. Good, Duke Energy chair, president, and CEO.

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U.S. Secretary of Energy Dan Brouillette also commented on the canceled project, saying that "The well-funded, obstructionist environmental lobby has successfully killed the Atlantic Coast Pipeline, which would have lowered energy costs for consumers in North Carolina and Virginia by providing them with an affordable, abundant, and reliable natural gas supply from the Appalachian region."

Environmentalists rejoiced, with Southern Environmental Law Center's Senior Attorney Greg Buppert saying, "This is a great day for the people of Union Hill, for public lands, for landowners in the path, and for all North Carolinians and Virginians, who deserve a clean energy future and are no longer on the hook to pay for this $8 billion pipeline."  

By Tsvetana Paraskova for Oilprice.com

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